Boeing battles to keep 747-8 program on track

Boeing Commercial Airplanes faced fresh questions over its ability to stick to program timelines again last month. No more than six weeks after 747-8 Intercontinental program head Mo Yahyavi had confidently predicted that the new widebody would enter service as planned, the company announced that it would take a pre-tax charge against third-quarter results of approximately $1 billion “due to increased production costs and the difficult market conditions” associated with the program.

In fact, rather than flying three prototypes of the model’s cargo version by the end of this year, as Yahyavi had predicted in an interview with AIN in late August, the company now says it won’t fly the first airplane until early next year. Schedules now call for first delivery in the fourth quarter of next year, rather than the third, as last anticipated, although first delivery of the passenger version remains slated for the fourth quarter of 2011.

Notwithstanding Boeing’s official explanation, the October 6 announcement left many wondering what had changed in the month and a half since Yahyavi issued glowing reviews of the program’s progress. “At the time we really thought we were on track,” said a Boeing spokesman. “It’s just that once you get into production…you find out about late engineering issues.”

In fact, what CEO James McNerney termed lack of engineering maturity and insufficient engineering resources prompted Boeing to delay the program by six to nine months last November. But like a cancer that has gone into temporary remission, the same dysfunction didn’t fully display its ravages until the middle of this year’s third quarter, once actual production began on the first airplane.

“When we began assembling the first 747-8 Freighter in the third quarter, we encountered significantly more rework and disruption than we expected, both in our Everett factory and our supplier factories,” said the chief executive during the company’s third-quarter earnings call. “The root cause is something we talked about in the past. The engineering on this program was late to mature, and that was compounded by the limited availability of engineering resources.”

Earlier in the month a Boeing spokesman added yet another dimension to the explanation when he revealed that “build-up of tolerances between structure designed with older tools and the new design tools caused fit-up issues that have been discovered and are being resolved in the final assembly process.”

In fact, almost two months earlier Yahyavi talked of design changes that proved more radical than originally expected, a factor that relates directly to the “fit-up” issues. “I think when the program started the size of the changes was much smaller than it ended up being,” he said. “We ended up deciding to push the envelope and get better performance out of the airplanes, so we decided to go with a new wing design, and that was not originally in the plan.”

Unfortunate TimingMeanwhile, McNerney’s revelation that the shortage of engineering resources that led to the program’s first delay also played a part in this latest hiccup clearly meant that the 747-8 continued to pay a price for the 787’s failures. However, McNerney wouldn’t concede that Boeing suffered from an engineering shortage per se, but rather from unfortunate timing.

“I think that the experience we had on the [7]47-8…was more a result of both the [7]87 and the [7]47 reaching their engineering peaks at about the same time even though we originally planned to have the peaks be complementary rather than overlap,” said McNerney. “Because of the delay on the [7]87, that didn’t work out, so our manpower planning was confronted with a different reality than anticipated…It’s more of an issue of reality getting in the way of planning quite frankly, and we’ve got to fix that too; we’ve got to be better at managing surge capacity because things do not always go as planned.”

As of last month, the 747-8 team in Everett, Washington, had assembled more than 90 percent of first Freighter version, said McNerney, and more than 80 percent of the second prototype. “Lessons learned on the assembly of Airplane 1 are being applied to Airplane 3, and the initial join and integration has improved noticeably, with assembly now about 75 percent complete,” he said. McNerney added, “We are operating with better discipline on the 747-8 Intercontinental, the passenger model, where development is progressing well.” By late last month engineers had released 75 percent of the Intercontinental’s drawings, he said.

In fact, it seems clear now that the 747-8’s problems never really involved the Intercontinental’s engineering. In late August, the 747-8 team had delivered 100 percent of the Intercontinental’s drawing releases on time for 35 straight weeks, placing that project a month and a half ahead of schedule, said the program leader. By the third week in October, that record had risen to 42 weeks in a row, according to a Boeing spokesman. “This is unheard of,” said Yahyavi. “This is a very, very rigorous, yet well-disciplined process that we follow and it gets everybody involved and engaged…and so we are at a point where we have completed our critical design review on the Intercontinental basically three weeks ahead of plan.”

By last month Boeing had begun work on the program’s eighth airframe and, according to McNerney, plans for first flight of the first prototype remained on schedule for early next year. The company still plans a nine-month flight test program, culminating with entry into service with launch customer Cargolux during next year’s fourth quarter.

New Wing, New EngineBased on the supercritical airfoil design used on the 787, the 747-8’s new wings feature simpler, double-slotted flaps, composite spoilers, ailerons and lower rudder, raked wingtips and fly-by-wire control features. Boeing expects the combination of the new wing and the sole-source General Electric GEnx engines adapted for the 747-8 will allow the new freighter to carry 23 more tons– up to 154–than the standard 747-400F or fly up to 1,400 nm farther–4,390 nm–in lower cargo density environments.

It will also offer 16 percent more revenue cargo volume, allowing it to hold seven more standard containers, meet QC2 noise requirements for takeoff and landing and conserve ton-mile costs at a rate of 16 percent. Next year Boeing plans to use its second flight-test airplane to perform nautical air miles (NAMS) tests to determine exactly how far the airplane will fly per pound of fuel.

By the start of October the 747-8 freighter had drawn firm orders for 78 units from the likes of Cargolux, Korean Air, Emirates, Dubai Aerospace Enterprise, Guggenheim, Atlas Air Cargo, Nippon Cargo, Cathay Pacific and Volga Dnepr.

Confident of IntercontinentalThe Intercontinental, meanwhile, had still drawn just a single firm airline order for 20 examples from Lufthansa and seven VIP variants–mainly from Middle East customers. But Yahyavi dismissed any notion that Boeing’s decision to use a common-sized airframe in the passenger and cargo versions rather than pursue the original plan to build a slightly shorter, longer-range Intercontinental had hurt the airplane’s prospects.

Yahyavi insisted that it remains only a matter of time before the orders start flowing for the 467-seat Intercontinental, which, according to Boeing’s calculations, will offer 13-percent lower seat costs and 28-percent more cargo volume than today’s 747-400. “We are actively involved with several customers on the Intercontinental airplane,” said Yahyavi, who, while not inclined to identify specific candidates, did confirm that Emirates Airline hadn’t joined the list at the time.

“Actually I think the sizing of the aircraft is perfect,” he noted. “Like I said, it’s a niche market. There’s nothing out there that can carry 400 to 500 passengers with an 8,000-nautical-mile range. This is the right airplane, the right product; there are lots of airlines that need these. We have done our homework, and based on that decided to launch this program. I know that when the market is back everything is going to go better than is happening now as far as orders.”

Although Yahyavi expressed full confidence that the Intercontinental can complete its flight-test program in nine months, Boeing had established a similar time frame for the Freighter–on which, he admitted, “we are going to have, let’s say, challenges…and we’re gong to be very busy on it. But for the Intercontinental the majority of the structures are going to remain the same.”

Meanwhile, both versions will benefit from an effort to shave 3,500 pounds from the 970,000-pound maximum gross weight airframe. Boeing had identified and approved specific targeted items and began implementing the program late this past summer, according to a company spokes- man. “This is like any development program; your first article airplanes are slightly heavier than you want them to be,” conceded Yahyavi. “At this point we are working with our suppliers. For example, one of our suppliers– [GE subsidiary] Middle River, which makes our thrust reversers– is coming up with some really good ideas for weight reduction and we are working with them to apply those.” One of those ideas involved switching from a steel to an aluminum ring. Asked about possible changes to materials used in other parts of the 747-8 to lighten the structure, Yahyavi confirmed, “There are a few of those examples going on right now.”